Microsoft Corp. will cut as many as 5,000 jobs, its first companywide firings, and said sales and profit will probably drop as the global recession eats into demand for software. The stock fell the most in three months.
The reductions, about 5 percent of its workforce, will take place in nearly all areas and will help save $1.5 billion, Microsoft said today in a statement. The company will also eliminate merit-based pay raises, cut travel costs and reduce the use of contractors to shore up profits.
Chief Executive Officer Steve Ballmer is under pressure to reduce costs as sales growth dries up in what may be the worst recession since World War II. The company’s Windows division, which accounts for about a quarter of sales, is suffering after personal-computer shipments rose at the slowest rate in six years in the fourth quarter.
(Bloomberg.com)
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